Daily Briefing

Oil giant Shell has pulled out of the controversial Cambo oil field development west of Shetland, reports BBC News. Shell, which had a 30% stake in the project, said it had carried out “comprehensive screening” before concluding that the economic case for investment in the North Atlantic project was “not strong enough”, the outlet reports. The field could produce up to 170m barrels of oil equivalent and 53.5bn cubic feet of gas over 25 years, says Reuters. The decision was welcomed by environmental groups including Greenpeace, which said the decision should mark the “death blow” for Cambo, reports the Independent. The paper reports the comments of Ed Miliband, shadow secretary of state for climate change and net-zero, who said the move was a “significant moment in the fight against the Cambo oil field”, adding: “It makes no environmental sense and now Shell are accepting it doesn’t make economic sense.“ The Guardian notes that the UK government was already facing a legal challenge from Greenpeace over its decision to allow the new drilling to go ahead. It adds: “Green campaigners have argued that the green light for Cambo should not be given, in light of the UK’s legally binding target to reach net-zero emissions by 2050. Government approval for exploration at the site, 78 miles (125km) west of the Shetlands, in waters 1,000 metres deep, was first given in 2001.” However, even before Shell’s decision, “the future of the development was unclear, because UK regulators had yet to grant consent”, says Bloomberg. It notes that “another Shell-operated project – Jackdaw – failed to get approval earlier this year”.

The Daily Telegraph says that “senior figures at Shell are understood to have become frustrated by the UK government’s unwillingness to give Cambo public support”. The paper adds that Nicola Sturgeon, Scotland’s first minister, has “openly opposed the project”. Private equity-backed Siccar Point, which owns a majority stake in the field, said it “will continue to engage with the UK Government and wider stakeholders on the future development of Cambo”, reports CNN. But, the outlet adds, “it was unclear whether the field could be developed without Shell’s support”. Siccar Point has said that it plans to invest $2.6bn in Cambo and that it has already spent $190m in the four years since it acquired the rights to the field, says the New York Times. The Financial Times, Daily Mail and i newspaper also have the story.

Elsewhere, new research finds that California is the largest consumer of oil from the Amazon rainforest, reports the Independent. The paper says that “one in nine gallons of fuel pumped in 2020 in California come from the Amazon, and in Southern California, the average is one in seven gallons”. It adds that “rampant drilling projects” in the Amazon are “leading to deforestation and pollution, and endangering the lives of Indigenous communities”. Reuters also has the story.

The Organization of the Petroleum Exporting Countries and its allies, known as Opec+, have agreed to pump more barrels of oil from January, reports the Guardian. The group agreed to go ahead with a plan to increase production by 400,000 barrels a day in the new year, the paper explains, but they “left the door open to putting the brakes on production should the [Covid-19] Omicron variant lead to further restrictions on travel and trade”. In what the Financial Times describes as “an unusual move”, Opec+ said its December meeting would remain “in session”, which suggests that “Saudi Arabia, Russia and other large producers could intervene quickly to prop up prices if necessary”. The decision to increase production “comes after weeks of pressure from the White House, which had called on the group to add more supply to cool prices that have risen sharply in the past year and fed fears of broad inflation in the US”, the FT says. It adds that, “late last week, fears about the possible impact of the Omicron variant on the global economy resulted in a sudden, steep drop in oil prices, sparking speculation that Opec+ would cease the monthly production increases completely. Analysts said Saudi Arabia’s decision not to intervene to halt the price drop suggested that geopolitical concerns had been a factor”. A White House spokesperson said the US government “welcome[d] the decision” by Opec+, reports Reuters, but added that they had “no plans to reconsider” the recent decision to sell 32m barrels of crude from the US Strategic Petroleum Reserve.

Glencore’s new chief executive has defended the company’s plan to run down its coal mines, but said he would be prepared to spin off the business if it became a problem for its biggest shareholders, reports the Financial Times. Speaking at the company’s annual strategy update yesterday, Gary Nagle – who took control this summer – said that Glencore’s plan to close all of its coal mines within the next 30 years was the “responsible strategy for both our business and for the world”. The paper adds: “Nagle said the plan had received 94% shareholder approval at its annual meeting. However, he added, ‘if they change their mind…and say to us they have a different view and they think splitting off the coal assets is the right way to go, then we need to consider it – it’s their capital we are employing in this business’. Many big investors now think spinning off fossil fuel assets is the wrong thing to do because new owners might seek to increase production and therefore carbon emissions.”

Meanwhile, a Bloomberg article looks at why Adani’s “disputed mine” in Australia “shows ditching coal isn’t easy”. It says: “Proposed in 2010 and stalled by legal challenges, financing setbacks and a sustained campaign from climate activists, the operation is scheduled to ship first cargoes before the end of December and aims to supply an initial 10m tonnes of thermal coal annually for at least 30 years…Opposition to the Carmichael mine, located inland from Australia’s iconic Great Barrier Reef in Queensland state, has spanned environmental activists to Wall Street banks, insurers and investors, offering a microcosm of the escalating international campaign against the most polluting fossil fuel in the past decade…Yet the start of overseas sales also reflects coal’s still-pivotal role in the world’s energy mix, a status that led China and India – the top consumers – to dilute efforts to set a global deadline to phase out the fuel at the COP26 climate talks. Demand is rising in parts of Asia, and the remedy from Beijing and New Delhi to recent power shortages was to ramp up coal production.”

Also in coal news, a Washington Post analysis discusses “specific financial tools” that could help with phasing out coal. And Reuters reports that Russian president Vladimir Putin yesterday “accused management of falsifying methane data at a Siberian coal mine where an explosion killed 51 people last week”.

There is continuing coverage of the UK government’s newly published scheme for farming subsidies in England following Brexit. The Financial Times reports that Lord Deben, chair of the UK’s Climate Change Committee (CCC), labelled the plans “not good enough”, while the Wildlife Trusts, National Trust and Royal Society for the Protection of Birds described them as “hugely disappointing”. Details on the Sustainable Farming Incentive (SFI), which will replace the EU subsidy scheme, were published by the Department for Environment, Food, Rural Affairs (Defra) yesterday. Under the plans, farmers can “apply from next year to receive payments for caring for soil for the first time, to help ensure that carbon is kept sequestered in the ground”, the FT explains, and notes that “this will include measures such as planting ‘cover crops’ in winter, cultivating diverse plant types and reducing the use of fertilisers and pesticides”. However, Deben warned that “we have got to move faster”, adding: “Unless we make sure as much of our soil as possible is sequestering carbon, and until we have a system where we can measure that year by year, we cannot meet our net-zero goals.”

The Independent says that while “incentives for broader enhancements are still yet to be confirmed”, the proposals received “immediate backlash from environment organisations”. Kate Norgrove, WWF-UK’s executive director of advocacy and campaigns, says the measures outlined “fall short of what’s needed to align this crucial sector with the government’s climate and nature promises”. She adds: “To deliver the wholesale transformation that’s needed, ministers must speed up the introduction of higher ambition payments to farmers, as part of a strategy to achieve our nature targets and enable people to eat more sustainably, while driving down agricultural emissions significantly by 2030.” Craig Bennett, the chief executive of the Wildlife Trusts, tells the i newspaper that the standards are set too low, rewarding farmers without requiring them to embrace greener practices. “This was supposed to be a break from the past,” he says. “If you look at what is in SFI today, ultimately a lot of it is suddenly giving lots of subsidies for farmers to carry on with the status quo, with business as usual.” The Daily Mail says the organic farmers have “hit the jackpot” with the new scheme.

In related UK news, Deben told the Country Land and Business Association (CLA) conference yesterday that people “should eat less [meat] and better [meat], and the best meat is the meat which actually is produced in these islands”, reports the Press Association. The newswire notes that Deben is “himself a small-scale organic farmer who produces meat”. The Independent reports that UK supermarket Morrisons has announced plans to launch carbon-neutral eggs by 2022. The Guardian reports that British Airways has “signed a deal for aircraft fuel made from recycled cooking oils and other household waste to be produced at scale in the UK and to be in use as early as 2022 to help power its flights”. And Politico has a short video – sponsored by Shell – on “the role of sustainable aviation fuel in decarbonising the aviation sector”.

In the US, Reuters reports that the government “plans to propose in days the amount of biofuels oil refiners must blend into their fuel mix this year and next year, as it reaches out to lawmakers to discuss the move”. The newswire notes that the government “has delayed decisions on 2021 blending obligations by more than a year, and it missed a deadline to finalise 2022 obligations this week”. Bloomberg has the story too. Reuters also covers a new report from the US Environmental Protection Agency, which finds that more than one-third of food produced in the US is thrown away, meaning the nation is falling far short of a 2015 goal to reduce that waste by half by 2030.

Thousands of homes across the north of England and Scotland faced their sixth night without power yesterday as soldiers were deployed to conduct door-to-door checks to 4,000 homes in the mountainous Grampian region of Scotland, reports the Financial Times. It continues: “More than 15,000 households were still without power on Thursday afternoon in Aberdeenshire and Perthshire in Scotland, parts of Wales as well as Cumbria and Northumberland in England. Engineers have struggled to repair the extensive damage after high winds and heavy snow [during Storm Arwen] brought down electricity lines and initially cut off power to almost 1m homes in the UK.” The paper says that “the lengthy outages have led to criticism over the handling of the crisis with Ofgem, the energy regulator, promising to review the resilience of the country’s electricity network and the emergency responses of the operators which own the local distribution networks. The emergency has also increased concerns over the resilience of the grid in the face of climate change”. The prime minister’s official spokesman said a further 7,949 homes had had power restored since Wednesday – meaning 98% of the 950,000 homes originally affected now have electricity, reports the Press Association.

In related news, the fuel poverty charity National Energy Action (NEA) has warned that an increase to the energy price cap in April could see the cost of heating the average home doubling since last April, the Press Association reports. And a column by market analyst John Kemp in Reuters looks at why “Britain’s old and badly insulated housing stock is emerging as a major problem for government efforts to reduce greenhouse gas emissions”.

In Europe, Bloomberg reports that “European Union energy ministers clashed again over what to do about soaring power and natural gas prices as consumers and businesses brace for a tough winter”. It continues: “At a meeting on Thursday, countries including Spain, France, Italy, Greece and Romania proposed to amend existing laws on how prices in the 27-nation bloc are set. Germany, Austria, the Netherlands, Denmark and others are against any measures that depart from the ‘competitive principles of our electricity and gas market design’, according to a statement from the group.” The newswire notes that “surging energy prices are an unwelcome distraction for the EU, which is negotiating green legislation designed to set the course for climate neutrality by 2050. While some member states say the crisis shows the shift to cheaper renewable energies should be accelerated, others warn the transition should be gradual to help prevent any price spikes”. Reuters also has the story, while Bloomberg reports that “Europe’s carbon price has almost tripled in 2021”, rising above 80 euros ($90.272) a tonne today for the first time.

In a feature for the New York Times “Headway” team – which looks back at predictions and promises from the past – freelance journalist Lois Parshley delves into the EU’s “20-20-20 Pledge” on climate change. The promise committed the bloc to reducing its emissions by 20% from 1990 levels, increasing renewable energy to 20% of electricity use and increasing energy efficiency by 20%, Parshley explains: “By the 2020 deadline, the EU had achieved two of its three goals – an example of a major emitter achieving a climate pledge. Overall emissions were 24% lower than in 1990, by the bloc’s accounting, and renewable energy was about 20% of its electricity use.” However, “many climate scientists and others involved in the process question the EU’s accounting”, Parshley says. As coal use declined across Europe, “the power sector shifted to renewable sources”, says Parshley, “but that created its own controversy” as the EU counted “biomass energy as a renewable, carbon-neutral source, akin to wind and solar”. She explains: “Most biomass is wood that comes from cutting down forests and making the material into pellets. Because pellets can be burned in existing coal-fired power plants, they provide an easy, comparatively cheap way for countries to reduce their emissions – at least on paper. The EU and the Intergovernmental Panel on Climate Change – the main scientific body on climate change – count carbon emissions from biomass where the trees are cut down, not where the material is burned. That means the bloc’s accounting doesn’t factor in the carbon footprint of processing trees into wood pellets, shipping them across the ocean or burning them for fuel.” As a result, “critics argue its true emissions impact has been underestimated”, Parshley says.

Tropical cyclones in the Atlantic Ocean have been increasing in frequency over the past 150 years – even when accounting for the paucity of observational data a century ago. Using modern weather forecasting models and three sets of historical reanalysis data, the study produces several time series of simulated hurricanes dating back to the beginning of the 20th century or earlier. The findings show that, although cyclones were “undercounted” in the early records, there has been generally “increasing tropical cyclone activity” since the 1850s – in contrast to previous studies. However, they note that most of this variability can be attributed to regional change, rather than global climate change.